How about another indicator that the era of ultra-low interest rates is nearing an end?
The federal government, which has access to better information than most of us, jumped into the bond market last week with an offer to sell $750 million of debt that will mature in December 2064 – 47 years from now.
If history is any guide, there will be any number of recessions, crises and the like over the decades ahead. That’s why it is normally expensive to borrow money for 50 years. Yet investors were willing to lend Canada hundreds of millions dollars at a ridiculously low rate of 2.2 percent. For an outfit as big as the federal government, which generates annual revenue of $300 billion, and has the sovereign authority to print currency whenever it wants, borrowing at those terms is like getting money for nothing.
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